For unproved income, tribunals must apply prevailing minimum wages and prescribed future prospects.

On 4 March 2023, Devjibhai Somatbhai Makwana, aged approximately 34 years, was riding a motorcycle when a truck allegedly being driven rashly and negligently from the wrong side collided with it. He sustained serious injuries and died during treatment

His dependants claimed that he worked as a labourer and earned Rs.20,000 per month, but no cogent documentary or other evidence proving his income was produced

The Motor Accident Claims Tribunal, Bhavnagar at Mahuva, assessed his notional income at Rs.6,000 per month and awarded Rs.12,79,600 with interest at 9% per annum

The claimants challenged the award before the Gujarat High Court on the issue of quantum alone

1. Whether, in the absence of cogent evidence regarding the deceased’s income, his income ought to have been assessed on the basis of the minimum wages applicable in Gujarat at the time of the accident.

2. Whether the compensation under future prospects, loss of dependency, loss of consortium, loss of estate and funeral expenses required enhancement in accordance with the applicable principles laid down by the Supreme Court.

3. What additional compensation and interest were payable to the claimants.

The Court applied the principles governing compensation under the Motor Vehicles Act, 1988, including assessment of just compensation for death in a motor accident.

Relying on National Insurance Co. Ltd. v. Pranay Sethi, (2017) 16 SCC 680, it held that future prospects must be added to the established or reasonably assessed income and that compensation under conventional heads must be awarded in accordance with the prescribed principles.

In the absence of reliable proof of actual income, the Court applied the minimum wages prevailing on the date of the accident.

Applying the principles referred to in Magma General Insurance Co. Ltd. v. Nanu Ram alias Chuhru Ram & Ors., (2018) 18 SCC 130, it awarded consortium to each eligible legal representative.

For a deceased aged 34 years, a 40% addition for future prospects and a multiplier of 16 were applied, with a one-fourth deduction towards personal expenses since the deceased left five legal representatives.

The Court found that the Tribunal’s assessment of Rs.6,000 per month was below the minimum wages applicable to a skilled worker in Gujarat at the time of the accident. It therefore reassessed the deceased’s monthly income at Rs.9,887.

Adding 40% for future prospects resulted in a monthly income of Rs.13,842; after deducting one-fourth towards personal expenses, the monthly contribution to the dependants was assessed at Rs.10,382.

Applying the multiplier of 16, the loss of dependency was calculated at Rs.19,93,344.

Since the deceased left five legal representatives—his parents, widow and two children—the Court awarded consortium at Rs.48,400 each, totalling Rs.2,42,000.

It further enhanced loss of estate and funeral expenses to Rs.18,150 each in accordance with the applicable conventional-head principles.

The total compensation was consequently recalculated at Rs.22,71,644.

The additional amount was directed to carry interest at 9% per annum from the date of filing of the claim petition until realization.

Respondent No. 3, the insurer, was directed to deposit the awarded amount, including the enhancement, within six weeks of receiving the order, after which the Tribunal was to disburse it to the claimants subject to due verification and deduction of any deficit court fee.

The impugned award was modified accordingly, with no order as to costs.